All Forum Posts by: Howard Klahr

Are you newly licensed or experienced?

To address the question posed in the thread title ... there is really not an "average" appraisal cost.  In general appraisal fees are based on the time and complexity of the assignment, estimated turn time to complete the assignment as well as the qualifications of the appraiser performing the assignment.  Rush assignments will command a higher fee and more experienced appraisers will often reflect higher fees than newly licensed appraisers.

No to the specifics, residential multi family properties (2 to 4 units) have a higher appraisal fee than single family homes.  This is due to the expanded scope of work and lender requirements for these type of assignments as opposed to that for a typical single family residential home.  The fee you noted is within a general reasonable range.

In order to utilize a 1031 exchange the relinquished property (the property being sold) as well as the replacement property(ies) must be investment properties or utilized within a trade or business as it relates to real property.  So therefore based on your description, unfortunately no the property would not meet the requirements for a 1031 exchange.

Contact a qualified intermediary and they can explain in great detail what and how to facilitate 1031 exchanges.  There are many rules to be followed and strict timelines associated with this type of transaction, although this deal structure is a very powerful tool.

I'm not entirely clear on a few issues.  Is this for one residence or several homes?  If this is for one single residence, the appraiser is reporting a value based on your post of $850k subject to completion.  Your assertion is that the as completed value should be higher.  Why?  How does your opinion of value differ from the appraiser in terms of actual market data?

If this is for several homes, the appraisal report should contain at least three reported values 1) "as is" - which presumably is the land value, 2) "as completed" - which reflects the point at which construction is completed but may not all be sold yet and 3) "as stabilized or upon sell out" - this reflects the retail value of all the homes to be sold.  The lender/bank utilizes these values in not only determining the loan size but how much and when to fund the construction draws.

The answer will depend on how qualified your list is before sending the info.  The more targeted the list and the data source the lower the return rate

The answer depends on how you are setting up the ownership interests.  There are benefits to keeping things separate although combining accounts is a greater convenience.  Also check with your accountant and attorney as their are tax and legal liability implications here.

The issue of self management of retaining the services of a professional is one of time and cost.  Regardless of how many units you manage, the issue is how you are measuring the cost.  While professional managers have an easily identifiable cost, the cost of self management is often hidden.  How many of ya'll that self manage take into account the cost of your time?  Is is in fact cheaper to outsource many of those tasks  as opposed to taking into account the value/cost of your own time?

Another factor is that while everything is going well, it may be perceived to be cheaper to self manage.  What is the cost to address any issues that arise?  Don't forget to include the cost of the learning curve to get up to speed on how to deal with that specific issue.

If you think the cost of a professional is expensive, try the cost of an amature.

Have you compared the specific details between the two reports?  What are the differences?

You are probably going to be seeing the cap rates almost half that range in that market for stabilized properties

The best use of a home warranty is as a marketing tool for a seller to allay buyer concerns.  Build the price of the warranty into the sale price of the house.